Zero hours employment contracts

Fresh controversy has hit the zero-hours employment contracts debate following the publication of research which indicates that as many as 1 million people in the UK might be employed under the contracts.

Under a zero-hours contract, the worker does not agree to work a set amount of hours and is only paid for the number of hours actually worked. The employer does not guarantee work, but the worker is expected to accept work provided (but is legally able to turn it down). Common amongst these types of contracts is that the worker will be on standby which effectively prevents him or her from working elsewhere. If the worker is allowed to work elsewhere, often he or she will need written permission from the employer first.

Previously, it was thought that only 200,000 people were employed under zero-hours contracts. However, a poll conducted by the Chartered Institute of Personnel and Development (“CIPD”) of 1,000 employers suggests that the contracts are being used more widely than the government thought, with perhaps more than 1 million people in the UK employed under the contracts, representing 3-4% of the total UK workforce. Large retailers, pub and cinema chains and even Buckingham Palace have been making use of them.

Unions and poverty campaign groups have accused employers of using the contracts to escape their duties as well as cutting benefits for their staff. However, employers such as the National Trust argue that weather-dependent markets rely on the contracts as they given employers the necessary flexibility to take on more staff during busy periods.

The Secretary of State for Business, Innovation and Skills, Vince Cable, is conducting a review into zero-hours contracts. Labour’s Chuka Umunna (Vince Cable’s opposite) has said that they should be the exception rather than the rule so that employees and their families feel less insecure. However, the study revealed that only 16% of those employed under zero-hours contracts felt that their employer was not providing them with enough work.

Now that the pressure is on, it will be interesting to see what the government’s response will be.

Update

Recently our Partner and Head of Employment Robert Holland examined the current political views on temporary workers' rights as part of an edition of online magazine Lawyer Monthly. He commented:

He commented:

"What has traditionally been the preserve of Labour policy making has seen a somewhat startling move by the Conservative Party to claim the mantle of protector of the rights of the million or so workers in the UK who are on irregular, temporary or freelance contracts.

Along with high profile cases such as Pimlico, and the GMB backed Uber case, where drivers won entitlement to holiday pay, it would seem that the courts are also backing the rights of those who don’t work in the traditional manner.

Yet for many 'Zero hours' contractors as the media like to label them, a court win or Political promise may seem small comfort. Without union backing or funding, they are reluctant to challenge multinational corporates who declare that no holiday pay is due, and feel helpless when their right to paid leave is denied.

But here is the rub. Unlike 'gig' workers, if those on a zero-hours contract accept an assignment, for however long, they are automatically due holiday pay for the duration of that contract.

It is still a common misconception, perhaps propagated by large corporates, that the right to holiday pay needs to be won.

For millions, they have it already in the nature of their contract. Indeed, following Bear Scotland v Fulton UK EAT 47/13, the amount of pay should include variables like overtime and commission.

It seems that despite the spotlight, a certain ambiguity still prevails. It is time that the rights of our temporary workers are spelled out clearly and not swallowed up by political sound bites and forgotten once an election is over".